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Informist, Monday, May 4, 2026

By Anand JC

MUMBAI – Hero MotoCorp Ltd. is expected to report multi-quarter-high growth in its top line and bottom line for the March quarter, helped by a low base and healthy growth in despatches of its two-wheelers in India and abroad, according to analyst estimates. Multiple price hikes by the company during the reporting quarter are expected to have offset raw material cost pressures, thereby lending stability to Hero MotoCorp's margin performance.

The automotive giant's net profit for the March quarter is projected to grow 30% on year to INR 14.01 billion, according to an average of estimates from 14 brokerages. If the expectations are met, the company's year-on-year bottom-line growth for the March quarter would be the strongest in seven quarters. The highest estimate for Hero MotoCorp's bottom line is INR 14.39 billion from Kotak Securities Ltd. and the lowest is INR 12.90 billion by Elara Securities (India) Pvt. Ltd.

Hero MotoCorp's revenue from operations for the March quarter is expected to be INR 125.18 billion, which would translate into year-on-year growth of almost 26%, according to the average of 14 estimates. If the company's results match the projections, the year-on-year growth in Hero MotoCorp's revenue would be the fastest in 15 quarters, barring the June quarter when it had fallen close to 6%. The projections for the automaker's top line range from a high of INR 127.83 billion from Nirmal Bang Equities Pvt. Ltd. to a low of INR 115.80 billion from Elara Securities.

For the financial year 2025-26 (Apr-Mar), Prabhudas Lilladher Pvt. Ltd. and Motilal Oswal Financial Services Ltd. expect Hero MotoCorp's bottom line to be INR 53.22 billion and INR 54.50 billion, respectively, translating to growth of around 17%. The two broking firms' top-line projections peg growth at about 15% to around INR 466 billion.

Hero MotoCorp, India's biggest two-wheeler manufacturer, was among the big beneficiaries of the income tax rebate in the Budget for FY26 and the cut in goods and services tax effective Sept. 22. The GST on two-wheelers with an engine capacity below 350 cubic centimetres was slashed to 18% from 28% while that on two-wheelers with engine capacity over 350 cubic centimetres was fixed at 40%. Hero MotoCorp holds 91% market share in the entry-level motorcycle segment. The company's despatches also reflect the benefits of the income tax rebate, as the income levels of its entry-level customers range between INR 600,000 and INR 1.2 million per annum.

"Entry-level motorcycle industry has seen revival with Hero MotoCorp gaining market share, although the premium portfolio hasn't yet reaped the benefits of GST2.0 rate rationalisation," Prabhudas Lilladher said. "Scooters and overall exports keep surging, albeit on a lower base. Its e2W (electric two-wheeler) market share is also growing in line with the industry."

The company's financials are expected to benefit from a lower base. Hero MotoCorp sold 1.71 million two-wheelers in the March quarter, up 24% on year but only 1% on quarter. In the year-ago quarter, the company's despatches had slumped almost 1% on year to 1.38 million units. The comparatively weaker quarter-on-quarter growth in despatches is also likely to be reflected in the company's financials as projections peg 1.5% growth in its revenue and a 4.5% fall in its bottom line.

Hero MotoCorp is projected to report earnings before interest, tax, depreciation, and amortisation of INR 18.10 billion for the March quarter, up nearly 28% on year but flat on quarter, according to the average of 12 estimates. The highest estimate for the automaker's EBITDA is INR 18.67 billion from Emkay Global Financial Services Ltd. while the lowest is INR 17.30 billion from Elara Securities.

The company raised prices of its automobiles twice during the quarter, once by INR 300 per unit in January and again by INR 700 per unit in February, Motilal Oswal said. "However, input cost inflation, especially at 4Q (Jan-Mar) end, was high, which could dent margins," it said.

Most analysts expect the company's EBITDA margin to be stable or grow by up to 40 basis points on year. However, they unanimously expect a quarter-on-quarter contraction in the company's margin. "EBITDA margin to decline 40bps QoQ due to higher raw material costs and production costs, though which should be partially negated by better operating leverage," HDFC Securities Ltd. said. Hero MotoCorp had reported an EBITDA margin of 14.2% in the year-ago quarter and 14.7% in the December quarter.

The company will announce its March quarter earnings Tuesday. Monday, the Hero MotoCorp stock closed 0.6% lower at INR 5,066.50 on the National Stock Exchange. The company's shares have declined roughly 12% since the company reported its December quarter earnings on Feb. 5.

Of the 12 brokerage reports on the company available with Informist, 11 have a "buy" or equivalent recommendation on the stock with an average target price of INR 6,689. This is roughly 32% higher than the current share price. The twelfth has a "hold" recommendation.

Following are the March quarter earnings estimates, in INR billion, for Hero MotoCorp from 14 broking firms in descending order of net profit:

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Edited by Rajeev Pai

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